Here’s an important idea from Adam Ozimek. It’s all too easy for pundits and politicians to engage in “now more than ever” thinking about the recession. Here’s my great idea for all times, and with unemployment at 9.1 percent we need to implement it now more than ever. A more useful idea, he suggests, is for people to talk about their “now less than ever” policy views. Ideas that you would normally support, but that would be bad to implement in the middle of a recession.
I have two on this score. One has to do with energy taxes. I’m enthusiastic about taxing greenhouse gas emissions, and I would support a large increase in gasoline taxes even over and above a carbon tax. But the midst of a severe labor market recession would be a terrible time to implement a policy of $8/gallon gasoline. That would suck money out of consumers’ pocketbooks, reducing spending on other things (and thus reducing the incomes of people who make non-gasoline goods and services), and all it would do is create extra revenue for a federal government that’s not currently in need of revenue. If anything, we should be suspending the gas tax and filling the Highway Trust Fund with freshly printed dollars.
The other is downsizing the military-industrial complex. I think our high level of spending on the national security state is very wasteful. We should have many fewer people designing and building military robots and many more working on household and industrial applications. We should have fewer soldiers and more police officers. But the good time to try to shift people out of one sector into another is when unemployment is low. When unemployment is low, firms are looking for new workers and they say things like “well this guy is clearly hard-working and competent, let’s get him up to speed in a new field.” When unemployment is sky-high, they say he doesn’t have experience and he just adds to the ranks of the unemployed with knock-on consequences for the rest of the community.
Basically, while the slogan “never let a crisis go to waste” makes sense as a legislative strategy, you don’t actually want to implement much in the way of big shifts until you first get people into some kind of jobs.